Tue, 07 Nov 2000

RI seeks $2b from Japan to develop cyber city

JAKARTA (JP): Indonesia expects to obtain about US$2 billion from Japan's special IT development fund to establish a "cyber city" at the Jakarta Fairground in Kemayoran, Central Jakarta, the developer said here on Monday.

PT Cyber City Indonesia (CCI) president Edward S. Soeryadjaya said the money would be used to develop an international standard cyber city at the former Kemayoran international airport, which would resemble cyber ports in the United States, Hong Kong and Malaysia.

"The IT development we have here now is sporadic in its growth. We would like it to be centralized in a place that has international standard infrastructure," he said during a media conference.

PT Jakarta International Trade Fair (JITF), the operator of the Jakarta Fairground and founder of CCI, has allocated at least 10 hectares of its 44 hectares of land at the former airport to develop the cyber city, Edward said.

He said only three hectares would be developed for the first few years.

Edward said CCI would begin by refurbishing JITF's main building, bringing it up to international multimedia standards with facilities like fiber optics for high-speed data, voice and graphic transmissions.

The refurbishment will cost $7 million, he said, adding that he hoped other investors would provide additional funds to back the Japanese loan.

Japan pledged $15 billion for information and technology projects in developing countries during the Group of Eight (G-8) summit in July on the island of Okinawa in Japan.

One of the agreements reached at the summit was to narrow the gap between rich and poor countries by fostering the spread of computer and telecommunications technology.

Edward said $5 billion of Japan's IT fund had been allocated for member countries of the Association of Southeast Asian Nations (ASEAN), and that Indonesia could receive at least $2 billion of this total.

JITF vice president director Yoichi Sato said the money would be in the form of a special yen loan, which would carry an annual interest rate of between 3.5 percent and 4 percent per annum and a maturity of between 25 years and 30 years, including a five- year grace period.

Roesdiman Soegiarso, JITF development director, said operating a cyber city may be the only way for the company to turn a profit.

JITF was given in 1990 a $100 million loan from the Jakarta Development Corporation (JDC), a consortium of Japan's private sector and government, to develop 44 hectares of land at the former Kemayoran airport as a major exhibition ground.

The plan has not been successful due to fierce competition from the Jakarta Hilton Convention Center, which is more strategically placed in the business district, Edward said.

The general manager of planning and finance at JDC, Satoshi Shigiya, said JITF twice rescheduled the first installment of its loan payment, and the next payment was due in 2004.

"It would be very embarrassing for Indonesia if JITF had to reschedule the installment once again," Abdul Muis, a member of the board overseeing the development of the Kemayoran complex, said. (tnt)